Monday, January 09, 2012

How much further can the S&P pressure resistance without actually breaking resistance? The tight action over the past couple of days will unwind with a decent one-day move; to catch it, trade break of Monday's high/low with a stop on the flip side. The S&P (Large Caps) is clinging on to its out performance of the Russell 2000 (Small Caps).

The semiconductor index enjoyed a strong day, starting with an opening gap and never looking back. It's caught in the no-mans land between its 50-day and 200-day MAs which makes it difficult to define the trend, although bulls are making a decent fist of it. Technicals bullish and improving - this suggests room for further upside.

Unfortunately, strength in the semiconductor index didn't translate directly to the Nasdaq. However, should semiconductors drive above its 200-day MA there will be additional support for continuation of a tech (Nasdaq and Nasdaq 100) rally. The Nasdaq has the additional benefit of trading above its 200-day MA.

For tomorrow, the S&P should (finally) clear 1,280 resistance. Watch the semiconductor index for potential leads in feeding a rally in the Nasdaq or Nasdaq 100.

Dr. Declan Fallon is the Senior Market Technician and Community Director for Zignals.com. I offer a range of stock trading strategies for global markets which can be Previewed for Free with delayed trade signals. You can also view the top-10 best trading strategies for the US, UK, Europe and Rest-of-the-World in the Trading Strategy Marketplace Leaderboard. The Leaderboard also supports advanced search capability so you can tailor your strategies to suit your individual requirements.

Helpful Links

Just for Fun..

This clock reached its time on October 19th 2017. This was a forecast for a "Major Market Top". Unfortunately, I can't find the link for the source material (but years ending in "7" was one of the red flags) but I thought it interesting enough to start this countdown clock 2 years ago.